In recent weeks, the price of gold has literally skyrocketed. Records were broken and the limit of $5,500 per ounce was exceeded. The prices of silver and industrial metals also recorded a large increase. The reason for geopolitical tension – trade disputes. However, after the historical peak, a sharp drop in prices, which analysts see as a healthy correction.
The global precious metals market is experiencing unprecedented upheavals with prices reaching their highest level since 1979. The price of gold has skyrocketed in recent days with an increase of about 90 percent since January last year. This broke the record and exceeded the psychological limit of $5,500 per ounce for the first time. The price of silver rose even more strongly – as much as 280 percent in the past 12 months. Silver reached the price of 120 dollars.
“The main driver is political and geopolitical instability around the world, which is contributing to the rise in the price of gold,” says David Knoblauch, an expert in precious metals.
Credit largely goes to US President Donald Trump and his sudden but also aggressive moves that caused geopolitical turmoil and trade disputes.
“The recent jump in gold prices is closely related to major changes in the global geopolitical and economic environment. The rise in risk fears in the world has further strengthened the role of gold as a commodity that replaces the dollar,” explains analyst Liu Yuxuan.
Investors sought safety in the golden haven due to the drop in the value of the dollar by around 12 percent.
“Currency devaluation is one of the causes of the abnormal movement in the price of not only gold. Silver has even surpassed gold in terms of percentage yield,” says finance professor Sanel Halilbegović.
However, the main question that arises is who profits and who loses in this situation?
“In this whole story, the central banks, big institutional smart money investors, hedge funds and others win. Who loses? Indebted states lose, so it is very, very important, even though there is a lot of talk in the media about BiH as not to say that it is an over-indebted state, it is very important that we maintain that status,” adds Halilbegović.
But how uncertain the markets are is shown by the fact that after a period of strong growth, the prices of gold and silver recorded a sharp decline. The correction, according to many, was expected considering the speed and strength of the previous growth. Although the large increase in gold and silver prices in recent months has attracted all the attention of the public, analysts note that industrial metals are also recording extraordinary results. Copper, aluminum and nickel also recorded strong growth and reached record or multi-year highs.
